Dated 29 December 2023
The Peruvian Supreme Court, in its ruling dated December 29, 2023, addressed a transfer pricing dispute involving Repsol Comercializadora de Gas S.A. The Court overturned a previous favorable decision for Repsol issued by the tax court. This ruling established new binding precedents, clarifying the criteria for assessing whether the guarantee of a reasonable timeframe has been respected in transfer pricing audits.
The Court outlined that to determine if the reasonable time guarantee has been breached, several factors must be analyzed. These include whether the audit pertains to transfer pricing regulations, the involvement of entities connected through low or no taxation jurisdictions, the complexity of the information required, and the geographical location. The Court also emphasized the importance of the taxpayer's responsiveness and the behavior of the tax administration in the process.
Furthermore, the Court ruled that for audits applying transfer pricing regulations, the provision for suspending the audit period, as specified in item 6 of article 62-A of the Unified Text of the Tax Code, must be observed.
This decision aims to ensure fairness and efficiency in transfer pricing audits.
A copy of the full Spanish language judgment can be found at https://tpcases.com/peru-vs-repsol-comercializadora-de-gas-s-a-december-2023-supreme-court-case-no-17824-2023/
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